AMD denies ATI spin-off explorations

June 22, 2015 | 09:18

Tags: #fairchild #financial #glofo #spin-off

Companies: #amd #ati #globalfoundries #ibm #intel

AMD has denied claims that, facing financial difficulties, it is exploring the possibility of splitting itself down the middle into separate graphics and general-purpose processor divisions - undoing its acquisition of GPU specialist ATI Technologies from 2006.

Advanced Micro Devices, now known simply as AMD, has long been the underdog of the processor world. Founded in 1969 by former Fairchild Semiconductor employees, who had seen their colleagues Robert Noyce and Gordon Moore leave the company to found Intel the year prior, AMD's start came in acting as a second-source supplier for other companies' logic chip IP. Its own designs soon followed, then diversification: RAM chips in 1971 and microprocessors in 1975 - its first being a reverse-engineered clone of rival Intel's 8080, along with its own Am2900 bit-slice microprocessor family. That's not to say that there was bad blood between the two companies, founded by former co-workers: in 1981, Intel and AMD signed a ten-year agreement to share x86 processing technology in order to fulfil IBM's requirement that the processor used in its Personal Computer (PC) family had second-source suppliers available.

The company continued to diversify its product portfolio in the years that followed, piggybacking on Intel's designs in the x86 market while also adding tweaks of its own, launching industry-first EPROM products and modem chips, and even shifting from DRAM to CMOS memory parts following a downturn in the market. In 1991, at the end of its technology-sharing agreement with Intel, AMD launched the Am386 - compatible with its rival's 80386 family, and the competition really took off. In the following years, AMD and Intel would trade blows, although it wasn't until the release of the ill-fated Pentium 4 that AMD would convincingly take the performance lead from its former partner company.

With the Pentium 4 retired and Intel once again on top, AMD diversified once more with the acquisition of graphics specialist ATI Technologies, formerly known as Array Technology Incorporated, in a 2006 deal valued at $5.4 billion in cash and shares. The ATI brand was subsequently retired in favour of AMD's own, with the gaming line going under the well-recognised Radeon moniker to this day. Financial trouble for the underdog company would lead to a spin-off of its manufacturing operations as GlobalFoundries in 2008, and in the years since numerous job losses and cut-backs have followed as Intel - now well on top in the general-purpose CPU performance stakes - and graphics rival Nvidia continue to eat the company's market share.

The reason for the history lesson: newswire agency Reuters reported late last week that AMD was investigating spinning off its graphics division, returning what was once ATI to independent control as a means to stem the company's losses in the face of a 26 per cent year-on-year decline in revenue. The claims of Reuter's anonymous source, however, have been soundly denied by the company itself. 'AMD provided official confirmation that we have not hired an outside agency to explore spinning-off/splitting the [graphics and general-purpose CPU divisions of the] company,' spokesperson Sarah Youngbauer explained in a statement released to press over the weekend. 'We remain committed to the long-term strategy we laid out for the company in May at our Financial Analyst Day, which encompasses all parts of the business.'
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